BAE-EADS Attempted Merger Fails

10/11/2012 7:13AM

BAE and EADS called off their merger after the U.K., France and Germany failed to agree on how much influence they should have over the combined entity. WSJ's Dan Michaels from Brussels and Dana Cimilluca from London fill us in with all the details. Photo: Getty Images

This transcript has been automatically generated and may not be 100% accurate.

I ... the it ... sector ... a stock ... ETF to be a systems was always get it all off she's a political involvement with ... companies ... and Addi its politics this on the deal ... I'm joined now by The Wall Street Journal's airspace was told that Dom Michaels in Brussels ... by and I have a report to dice the ... data to the vet here ... in London since discussed ... ad on new books of also the politics that some this deal ... can you I can you doubt tells that about that ... that that the main issue seems to been to ... Germany just wasn't sold on what they say was the economic logic of the deal ... Ai German officials ... told ... the ... French and British officials stands as well as the company ... I'm that they were convinced that the the benefits for coming out with the rest ... of the benefits were suppose to be ... stronger company ... I'm more defense sales for Germany especially in the last German officials are convinced that ... the eighty s but the ADP actually boost sales of German defense equipment in the last ... and they're worried that France and Britain which have bigger aerospace and defense industries and Germany ... way to squeeze out of Germany over the long run ... there also issues aren't frowns ... on French government likes to have the direct say companies to consider strategic ... Britt was on Comptroller best Germany was also on offer more ... I may never managed to to square the circle on all these issues ... by reticence of what's going on in European politics unready about say that the deal ... was notches for swaddled investors and companies are they can you tell us will hold up ... now that's right I mean we we hadn't even gotten to that stage yet so so in all governments that agree in the companies could agree and we would have a major hurdle to get over ... Invesco which is the largest shareholder owns an enormous a thirteen percent ... aam had come out fairly forcefully against the deal ... and an issue with the ETF shareholders they clearly were happy with it either if you look at how much of that stock had sunk since the deal first surfaced up about on the ... Alameda was to the company sold the logic in that deal ... and done with this is an EP DAPA TXN TPA the chief executive Tom Enders ... well the ... government ... said they support him ... for the moment he seems say he is considered a strong manager he just can't granting ... era bus with tedious owns ... he ran for five ... years and I'll put it back on firm footing after ... several years troubles ... I he's concerned ... as it's ... a very gifted the victims of the strip was not a statesman ... is considered a pretty good and Austral manager ... his team tends to support him ... Airbus is a ... solid business at the moment that challenges ... but they're they're performing well ... up ... I refer to the ADSs Eurocopter the world that the helicopter may provide some interest extremist base business is done ok space is a great business ... ideas defense business is a challenge for them it's our ... too small it does this scale economies its products are not ... the most competitive ... by a doubt with the big issue that the merger it was to dress ... up your means to be seen ... with echoes of going into the big issue in any strategy chief said yesterday ... they will over coming months ... our ... address their their ... strategies to go in defense ... and a contrite problem ... crops and new strategy for defense ... ok and I mean all give me ... the deal was more important to be a given that defense spending is is pulling in some of its key markets ... what is this to be a golf course arriving to the fact that BA was willing to do this deal worth up to me they were to be taken over the server they were probably only get and up with their share offer you only have a forty percent combined company ... shows the Strategic pickle there and ... a lot people think that the next planned for them could be of some kind of break up scenario ... another thing they can't be discounted is that somebody scoops and now that they're ... you know you could call them of that of a wounded animal ... so you privee think in the case when a US defence players ... on the remains may seem that there's a very good chance that a few years from now strategically the aid will be in a different position from where I'm having just adjust quickly all the U S I mean I'd I remember talking saying simply is that ... they were looking for us all but nothing came ... you have sitting around the other way ... what could be a busy school fought here that the U K wouldn't be too eager to see a U S company take over such a strategically important common sense is it ... but the question is did the strategic challenges outweigh those concerns and could lead to see wins U S companies on the menu is they have